Neutral Citation Number: [2012] EWPCC 2
Case No: CC11 P01153
IN THE PATENTS COUNTY COURT

The Rolls Building,
7 Rolls Buildings
London EC4A 1NL

Date: 19/1/2012

Before :

HIS HONOUR JUDGE BIRSS QC
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Between :

	DAVID HOFFMAN	Claimant	
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	DRUG ABUSE RESISTANCE EDUCATION (UK) LIMITED	
Defendant	

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Judgment on Paper

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Judgment

His Honour Judge Birss QC : 

1.	This is an action for damages for copyright infringement.   The claimant Mr Hoffman is a photographer.   The defendant is a charity that has operated since 1993 in schools to help young people understand the dangers of substance abuse and to provide them with life skills to tackle peer pressure in this regard. 
2.	The claimant’s case is that from about 2004 the defendant’s websites www.dareteens.co.uk and www.dare.uk.com used 19 photographs of various drugs.  The images used were, says the claimant, copies of the claimant’s copyright photographs.  The defendant did not have the claimant’s permission.  The claimant claims damages for this infringement.  
3.	The claimant issued proceedings in November 2010. The course of the proceedings was described in my judgment dated 21st October 2011 [2011] EWPCC 32.   In that judgment I invited the parties to consider the conduct of the proceedings, whether liability and quantum could be determined at the same time and whether the case could be resolved on paper.
4.	On the 2nd November 2011 Neil Gibson of CB Associates Ltd, insolvency practitioners, wrote stating that he had been appointed joint liquidator of the defendant on 26th October and provided a copy of his report.  He indicated that it is unlikely there will be a dividend to any class of creditor and confirmed that the company was unable to be represented due to the cost, that he had no objection to the court dealing with the claim on paper and that the defendant would be filing no further evidence in the matter.  
5.	On 7th November Mr Hoffman wrote asking for judgment to be entered in full or in such terms as the court sees fit.  At point 8 of his letter Mr Hoffman indicated that he was content for liability and quantum to be decided in one go and on paper.  
6.	It seems to me that it is appropriate to decide both liability and quantum on the papers, pursuant to CPR Pt 63 r 63.23(3).  All parties consent to that course. 
7.	The Amended Particulars of Claim carries a statement of truth signed by Mr Hoffman.  The letter of 20th September 2011, which sets out the defendant’s defence, is signed by Mr Richard Goad on behalf of the defendant.  The letter does not bear a statement of truth but nothing would be served in requiring the defendant to file further documents in these proceedings.  To do so would be disproportionate.  I will allow the parties’ statements of case (including the letter of 20th September) to stand as evidence in this claim pursuant to CPR Pt 32.6(1) and PD 63 r31.1.  
8.	I will deal with liability first and then consider quantum.
Liability 
9.	Mr Hoffman claims to be the owner of the copyright which subsists in the 19 photographs.   The photographs are of the following drugs: 
2CB, Amphetamine, Anabolic Steroids, Cannabis, Cocaine, Crack, Ecstasy, GHB, Heroin, Ketamine, Khat, LSD, Magic Mushrooms, Methadone, PMA, Poppers, Solvents, Tobacco, and Yaba
10.	The defendant does not dispute this part of the claim.  I find that Mr Hoffman is the owner of copyright subsisting in the 19 photographs.  They are clearly artistic works under s4 of the 1988 Copyright Designs and Patents Act.  No issue of originality arises. 
11.	Mr Hoffman claims that the defendant used his photographs on their websites.  The defendant does not dispute that Mr Hoffman’s photographs were used on its websites. No issue arises about that.
12.	Mr Goad explains that at the time of the alleged infringement the defendant employed a firm to produce a website for the charity.  The firm found a Government sponsored website called “Talk to FRANK” on which the photographs appeared.  The defendant understood that the site was covered by Crown copyright and understood that the text and images could be used. 
13.	Although the defendant has explained that the firm it employed understood that the photographs in question were covered by Crown copyright, I have found that they were not Crown copyright.  The copyright belonged to Mr Hoffman.  Mr Hoffman’s case is that he did not give permission for the use of the images.   There is no reason to doubt that and I find that the defendant did not have the permission of the copyright owner to use the photographs.  
14.	Mr Goad states that the Department of Health acknowledged the site was not clear and agreed to pursue the matter on behalf of the defendant and numerous other charities who had also been misled.  The DoH made an offer to him which he did not accept.  The defendant was unaware, until these proceedings were served, that the DoH had not been able to agree a settlement with Mr Hoffman.  
15.	The defendant’s position is that it has not paid Mr Hoffman because it “had not intentionally or knowingly infringed his copyright” and “the Department of Health and their misleading web site were the cause of any infringement and not ourselves”.
16.	In terms of infringing acts under the 1988 Copyright Designs and Patents Act, Mr Hoffman refers simply to s16.  Neither party has addressed any submissions to this question.  Plainly the defendant has not committed every act covered by s16 of the 1988 Act.  It is a generic section covering various acts including copying (s16(1)(a)/s17), issuing to the public (s16(1)(b)/s18), rental or lending (s16(1)(ba)/s18A), performing in public (s16(1)(c)/s19), communicating to the public (s16(1)(d)/s20) and adaptation (s16(1)(e)/s21).  Section 16(2) then provides that the copyright is infringed by a person who commits those acts without the permission of the copyright owner (or authorises others to do so).
17.	The fact that the defendant may have thought that it had permission to use the images is not a defence to infringement under s16.   There is a form of innocence defence in copyright law provided for by s97 of the 1988 Act but that question is more appropriately dealt with below in the section on quantum.  The s97 defence would not mean that the defendant had not infringed, it would be a bar to damages. 
18.	Thus if the defendant did carry out one of the acts provided for in s16, the fact that they thought they had permission is not relevant.  Although this may seem harsh, it is not.  From the copyright owners point of view, the copyright is his property and his rights have been infringed if he did not give permission.   Copyright law provides for other secondary acts of infringement which generally amount to dealing in infringing copies and those acts only infringe if the person knew or had reason to believe that the copies were infringing copies.  However for the primary acts of infringement set out in s16, the policy of the law is that if there was in fact no permission, an infringement has occurred even if the person genuinely thought they had permission.  
19.	The key question on liability therefore is whether the defendant has committed any of the acts restricted by copyright as set out in section 16.  
20.	Clearly someone has copied Mr Hoffman’s photographs (s16(1)(a) and s17) in order to put them on the servers hosting the defendant’s website but it might be said that that person was the firm employed by the defendant.  I note that Mr Hoffman does not put his case on the basis that the defendant is liable for the acts of the web designer firm either as a joint tortfeasor nor does he advance any argument based on authorising under s16(2).  
21.	However the fact that the defendant employed a firm to produce the website does not mean that the defendant avoids liability under s16(1)(d)/s20.  Those provisions cover communication of the works to the public.  They were introduced into the 1988 Act by amendment as a result of the Information Society Directive 2001/29/EC (see esp. Art 3).  They apply to works created before or after the amendment and apply to acts committed after 2003.  Since the acts in this case began in 2004, they apply to this case.  
22.	Section 20(2)(b) is expressed to include making the work available to the public by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them (see Art 3.1 of the Information Society Directive).  
23.	There are various uncertainties surrounding the interpretation of Section 20 / Art 3 and questions have been referred to the CJEU (see e.g. Twentieth Century Fox v Newzbin [2010] EWHC 608 (Kitchin J); Football Dataco v Sportradar [2010] EWHC 2911 (Floyd J) and 2011 EWCA Civ 330; ITV Broadcasting v TV Catchup [2010] EWHC 3063 and [2011] EWHC 1874 (Floyd J)).  Nevertheless in a case like this one in which there is no jurisdiction question and the works concerned are artistic works (photographs) appearing on a website which can then be accessed by members of the public on demand, none of the uncertainties or questions arise.  
24.	In terms of s20(2)(b), in this case the claimant’s artistic works have been made available to the public on the defendant’s websites by electronic transmission in such a way that members of the public may access the works from a place and at a time individually chosen by them.  In terms of the Art 3.1 the claimant’s artistic works have been communicated to the public by wire or wireless means and have been made available to the public in such a way that members of the public may access the works from a place and at a time individually chosen by them.  
25.	Since the websites in issue in this case were the defendant’s own websites, and in the absence of any other evidence to the contrary, I find that it is the defendant who has committed the acts restricted by s20/Art 3 in relation to the works on its websites.   It seems to me on the paucity of evidence before me, the fact that the websites may have been designed by someone else does not matter.  In my judgment the defendant is the person responsible for those sites and is liable under s20/Art 3.  
26.	Accordingly the defendant has committed acts restricted by copyright under section 16 of the 1988 Act, specifically the act of communicating the work to the public, and thereby infringed Mr Hoffman’s copyright.
27.	Thus the claim succeeds on the question of liability.  The relief claimed is purely financial and I will deal with that next. 
Quantum 
28.	Having found that the claimant’s copyright has been infringed, it now falls to me to consider damages.  
29.	The first matter is whether the defendant has a defence under s97 of the Act.  That section applies if the defendant did not know and had no reason to believe that copyright subsisted in the work.  If it applies then no damages are awarded.   
30.	The defendant’s understanding was that they had the relevant permission to use the photographs.  The firm employed by the defendant had found the Government’s Talk to FRANK website and understood the content on it (which included these photographs) was covered by Crown copyright and therefore could be used.   The charity feels that it has been misled since that has turned out not to be the case.  No doubt the charity feels that the Dept of Health bear a degree of responsibility for the present state of affairs but that question is not before me.
31.	While I sympathise with the defendant, none of this amounts to a defence under s97.   The defendant understood it had permission under what it understood to be the relevant copyright.  That is a very different thing from an argument that the defendant had no reason to believe copyright subsisted at all (see Byrne v Statist [1914] 1 KB 622 relating to the corresponding provision of the 1911 Copyright Act).  To believe that one had permission under (in this case) Crown copyright is the opposite of a belief or reason to believe that there is no copyright in existence.   
32.	Accordingly I reject the defence under section 97.  Thus Mr Hoffman is entitled to damages from the defendant.   
33.	Mr Hoffman claims the revenue he has lost which he estimates at £250 per photograph per year (i.e. £250 x 19 photographs x 4 years = £19,000) and then a further 50% uplift on top for the use of the photographs as thumbnails coming to a total of £28,500.   He puts his case as either what he calls a sum for usage or damages.  Given that there was no agreement for the use of the images, the right approach is to assess the sum as damages. 
34.	The defendant’s position is that the value Mr Hoffman has placed on the photographs is well beyond their intrinsic value either to the defendant or any other charity.  It points out that the Dept of Health offered £50,000 to settle all the cases but Mr Hoffman did not accept it.  The defendant also submits that if it had been advised the photographs were not covered by Crown copyright, they would not have been used.  I do not doubt that latter submission but it does not help me to assess the correct level of damages in this case.  
35.	While I do not doubt that the £50,000 offer from the Dept of Health was in good faith, it is impossible to use it as any sort of scale against which to measure Mr Hoffman’s claim without knowing at least how many charities the Dept of Health was negotiating for.   Of course Mr Hoffmann does not accept it anyway. 
36.	Mr Hoffman states that the fees he seeks have been calculated using NUJ minimum rates but he does not elaborate.  My understand of such rates is that they depend on various factors such as the sizes of the images, the period of proposed use, the nature of the proposed use and the nature of the proposed user.  
37.	It seems to me that it would be disproportionate to seek further submissions from the parties.  They have put to me the material they wish to and it falls to me to do my best with the information available.
38.	The right sum by way of damages is the sum which a willing photographer in Mr Hoffman’s position and a willing user in the defendant’s position would have agreed upon as a charge for using the photographs on the websites. 
39.	Taking Mr Hoffman’s claim it divides into a number of elements, there is a basic fee (£250), it is charged per photograph, he then seeks to charge it annually (hence x 4) and then seeks a further 50% for thumbnails.  
40.	I have no doubt a willing user and willing photographer would have agreed a basic fee per photograph.  However I would expect that if 19 photographs were being employed, there would have been a substantial discount. 
41.	I reject the idea that the fee would have been a simple annual fee.  The parties would have agreed a single fee to use an image, having regard to the period of use.  I do not doubt that the fee would have been larger for a longer period of use but it would not scale linearly with the number of years.   
42.	It seems to me unlikely that a further extra fee would be agreed for thumbnails of the very same image.  I believe the usage fee would have permitted use of the images both as full size pictures and thumbnails.  
43.	The period of the infringement is about four years although not all 19 of the photographs appear to have been displayed for the whole period since Mr Hoffman has pointed out that after he contacted the defendant in 2007, 16 images were still in use in January 2008.  Mr Hoffmann has also pointed out that the photographs were still present on the servers in 2011 albeit as I understand it they were not linked to by links on the public web pages but he has not suggested that the sum by of damages should be increased as a result.
44.	Mr Hoffman contends his basic fee would have been an annual fee per photograph of £250 (albeit he contends thumbnails would be extra).  That comes to £19,000.  In my judgment that is too high a sum for the use of the 19 photographs in this case for a period of four years.  
45.	The photographs are pictures of drugs and it seems to me that the likely market for such photographs would be customers in the public and charitable sectors.   The right sum is a sum acceptable to a willing photographer aiming at that market and a willing charity or public sector organisation.  In my judgment a willing photographer operating in that market would not realistically expect to be able to charge a fee of that magnitude.   
46.	On the other hand while I do not doubt the sincerity of Mr Goad’s submission that the value of the photographs was minimal or of zero value, photographs only exist because a photographer like Mr Hoffman is prepared to use his skills to produce them.  He is entitled to realistic remuneration for the use of his works.
47.	Doing the best I can, in my judgment the right sum for damages in this case is £10,000. 
Interest
48.	Mr Hoffman seeks interest at 8% per annum.  He submits that it should run from 1st July 2006, being the midway point in the date range of the infringements.  I agree that the date of 1st July 2006 is an appropriate date from which to derive interest but 8% is too high.   
49.	The Bank of England base rate in the period from 2006 to today has varied from 5.75% in July 2007 to 0.5% today.  I take 3% as a fair single rate to reflect the changes over the period.  I will award 1% on top of that, making a single interest rate of 4% for the period.  I will apply a daily rate of £2.19. 
50.	The interest due up to the date of this judgment (19th January 2012) will be £2,444.57 (= (184 x £2.19 in 2006) + 5 years x 4% of £10,000 + 19 x £2.19 in 2012)
Costs 
51.	I will make an order for costs in Mr Hoffman’s favour.   I will direct that a summary assessment of those costs will be conducted in writing.  Mr Hoffman should make any submissions on that within 21 days of the date of this judgment. 
Judgment against the previous defendant
52.	As I mentioned in my judgment of 21st October 2011 [2011] EWPCC 32, when these proceedings were commenced the wrong defendant was named initially.  Although the defendant charity calls itself D.A.R.E. UK, there is also an unrelated company called Dare UK Ltd which Mr Hoffman named as the original defendant.  I had understood that this was all sorted out in May 2011 when I ordered the claim form and Particulars of Claim to be amended and permitted the claimant to re-serve them.  
53.	However in November 2011 the solicitors for the original defendant, Dare (UK) Limited, wrote to the court.  The issue was that Mr Hoffman had obtained a judgment in default against their client using the Request for Judgment procedure.  This judgment was dated 12th January 2011.   It was not clear to them whether the order I made on 5th May 2011, whereby Dare UK Ltd ceased to be a defendant and the charity Drug Abuse Resistance Education UK Ltd was named as the defendant also set aside that 12th January 2011 order.  The 5th May 2011 order did not mention the 12th January 2011 order.  Plainly the 12th January 2011 order should be set aside and I will do so.  Dare UK Ltd had nothing to do with this matter.